A stackelberg duopoly with binary choices of objectives
AbstractThis paper analyzes a Stackelberg model where firms choose their objective functions (profit or revenue) in order to achieve maximum payoff. The objective of the present work is to demonstrate that depending on the unit cost of production, firms make either asymmetric choices of objectives (low values of the unit cost) or symmetric choices (high values of the unit cost). As a result of these choices, the payoff advantage alternates between the first and the second mover in the market.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 32 (2012)
Issue (Month): 1 ()
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endogenous objectives; revenue objective; profit objective; first-mover advantage; second-mover advantage.;
Find related papers by JEL classification:
- D4 - Microeconomics - - Market Structure and Pricing
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Vardy, Felix, 2004. "The value of commitment in Stackelberg games with observation costs," Games and Economic Behavior, Elsevier, vol. 49(2), pages 374-400, November.
- Michael Kopel & Clemens Löffler, 2008. "Commitment, first-mover-, and second-mover advantage," Journal of Economics, Springer, vol. 94(2), pages 143-166, July.
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